Chronic Care Overhaul Proposed for Medicare

It's a familiar problem for families with an elder trying to cope with chronic health conditions:

Doctors don't talk to each other, and sometimes they prescribe drugs that work at cross purposes. Nobody seems to look out for the overall health of the patient.

With chronic illnesses like heart problems, diabetes and cancer taking a toll on seniors as well as Medicare's budget, a bipartisan group of lawmakers Wednesday proposed a new approach aimed at keeping patients healthier and avoiding hospitalizations.

They're calling it the Better Care Program. Teams of doctors, nurses and social workers would get a flat fee per Medicare patient, with fewer strings attached. The goal is to improve care coordination, benefiting the patient while moving Medicare away from paying piecemeal for tests and treatments.

The legislation is being sponsored by Sen. Ron Wyden, D-Ore., expected to take over leadership of the Finance Committee, which oversees Medicare. Joining Wyden are Sen. Johnny Isakson, R-Ga., and Reps. Erik Paulsen, R-Minn., and Peter Welch, D-Vt.

Wyden is calling it "chronic disease reform."

More than two-thirds of Medicare beneficiaries are dealing with two or more chronic conditions. And spending on chronic care patients accounts for more than 90 percent of the program's budget.

Finding savings through coordinated care that keeps seniors healthier has long been a holy grail for policymakers. President Barack Obama's health care law created "accountable care organizations" for Medicare, which aim to improve coordination. Lawmakers are currently overhauling the way the program pays doctors, with the goal of rewarding high-quality care.

Many doctors and hospital administrators believe that care coordination can save money and improve health. But they have struggled to prove that proposition to the Congressional Budget Office, whose experts are responsible for estimating the costs of proposed legislation. While some demonstration programs saved money, others spent more, and others ended up as a wash.

Part of the challenge is that providing better coordination itself costs money. The services of nurses and social workers are needed to keep patients from falling through the cracks. Another issue is that patients in fragile health can and do wind up in the hospital despite the best efforts of care givers to keep them at home.

The new proposal would build on the accountable care framework in the health care law. The new "better care" organizations would be paid a flat fee per patient. They would have more leeway on how to spend that money than is currently allowed under Medicare rules, for example, by charging lower copayments for certain kinds of high-value services. They would also be able to specialize in dealing with particular conditions.

Each senior who signs up with one of the groups would receive an individual care plan that would reflect their particular situation.

The plan has yet to be analyzed by the budget office, so its potential impact on Medicare's balance sheet is unclear.

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